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Sour Remarks on Jobs, European Bailout Pull Markets Down

Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill in Washington June 9, 2010, before the House Budget Committee about the progress of the recovering economy. AP Photo

Stocks sagged after a report from the Fed and negative comments from German Chancellor Angela Merkel about the European bailout.

After holding the 10,000 level for most of the day, the Dow lost 40, closing at 9,899. The NASDAQ fell 11 points to 2,158, and the S&P 500 gave up 6 to 1,055.

In her discussion of Germany's 80 billion euro cuts in spending over the next four years, Merkel said that lessons from the debt crisis must be learned. Fears that Europe's largest economy was pulling back underscored investor fear of a European slowdown that could spread globally.

Domestically, Fed Chair Ben Bernanke told a congressional subcommittee that while the U.S. economy should grow by 3.5 percent this year and more next year, the recovery is unlikely to spur enough jobs to put a dent into the unemployment rate or the federal deficit.

The Fed's "Beige Book" of economic activity showed middling improvement in April and May but highlighted concern over the negative effects of the weak commercial real estate market and the impact of the Gulf oil spill.

Separately, BP shares fell another 16 percent to $29.20, their lowest level since 1996.


Jill Schlesinger is the Editor-at-Large for CBS Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.